| 01. |
From the following data, calculate labour variances;
The budgeted labour force for producing product A is:
25 Semi-skilled workers @ Rs. 7.50 per hour for 50 hours
15 Skilled workers @ Rs. 8.25 per hour for 50 hours
The actual labour force employed for producing A is:
28 Semi-skilled workers @ Rs. 7.00 per hour for 50 hours.
14 Skilled workers @ Rs. 8.50 per hour for 40 hours
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ; LYV/LSUV = ;]
|
| 02. |
A contract job is scheduled to be completed in 40 weeks with a labour complement of 80 skilled operatives, 50 semi-skilled operatives and 70 unskilled operatives. The standard weekly wages of each type of operatives are – skilled Rs. 250 semi- skilled Rs. 156 and unskilled Rs. 124. The work is actually completed in 42 weeks with a labour force of 75 skilled, 50 semi-skilled and 80 unskilled operatives and the actual weekly wages rates average Rs. 265 for skilled: Rs. 140 for semi-skilled and Rs. 120 for unskilled labour. Analyse the variances in the labour cost due to various reasons.
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ; LYV/LSUV = ;]
|
| 03. |
The standard labour force of Mahan Plastics Ltd. is as under:
| Rs. |
| 60 skilled men at Rs. 5.00 Paise per hour for 25 hours | 7,500 |
| 80 semi – skilled men at Rs. 3.50 per hour for 40 hours | 11,200 |
| 18,700 |
| Rs. |
| 75 skilled men at Rs. 6.00 per hour for 24 hours | 10,800 |
| 100 semi – skilled men at Rs. 3.40 per hour for 42 hours | 14,280 |
| 25,080 |
Analyse the Labour Variances.
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0; LYV/LSUV = ;]
|
| 04. |
The following data have been taken from the cost records of EMILY Ltd.
| Standard | Actual |
| Grade A 100 workers @ Rs. 12 p.h. | Grade A 122 workers @ Rs. 12.50 p.h. |
| Grade B 75 workers @ Rs. 10 p.h. | Grade B 88 workers @ Rs. 9.50 p.h. |
| Budgeted hours 80 per worker | Actual Hours 80 per worker |
| Standard yield 4,000 units | Actual production 4,100 units |
Calculate all labour variances.
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ; LYV/LSUV = ;]
|
| 05. |
Given the following particulars, analyse the labour variance.
| Standard |
Actual |
| Labour |
No.of
persons |
Rate |
Hours
worked |
Labour |
No. of
persons |
Rate |
Hours
worked |
| Grade I |
90 |
Rs. 10 |
100 |
Grade I |
85 |
Rs. 12 |
120 |
| Grade II |
55 |
Rs. 8 |
100 |
Grade II |
55 |
Rs. 7.50 |
120 |
| Grade III |
40 |
Rs. 6 |
100 |
Grade III |
50 |
Rs. 7 |
120 |
| Standard rate production:200 units |
Actual production:190 units |
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ; LYV/LSUV = ;]
|
| 06. |
Calculate variances from the following data:
|
Standard |
|
Actual |
Number of men employed
Output in units
Number of working days in a month
Average wages per man per month
|
80
4,000
25
Rs. 1,200
|
|
90
4,180
24
Rs. 1,140
|
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0; LYV/LSUV = ;]
|
| 07. |
A contract job is scheduled to be completed in 40 weeks with following labour force:
| Skilled |
140 |
weekly wage |
Rs. 500 |
| Semi –skilled |
70 |
" |
" |
Rs. 450 |
| Unskilled |
90 |
" |
" |
Rs. 350 |
The work is actually completed in 44 weeks with the following labour force
| Skilled |
150 |
weekly wage |
Rs. 515 |
| Semi –skilled |
80 |
" |
" |
Rs. 440 |
| Unskilled |
70 |
" |
" |
Rs. 365 |
Analyse variances in labour cost.
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ; LYV/LSUV = ;]
|
| 08. |
Standard labour hours and rate for production of Article SARD are given below:-
|
Hrs |
Rate
(Rs.) |
Total
(Rs.) |
| Skilled Workers |
8 |
15 per hour |
120 |
| Semi-Skilled Workers |
7 |
12 per hour |
84 |
| Unskilled Workers |
5 |
8 per hour |
40 |
|
|
|
244 |
Actual data
|
|
Rate Per hour
(Rs.) |
Total
(Rs.) |
| Articles Produced |
1,000 units |
|
|
| Skilled Workers |
7,800 hrs |
16 |
1,24,800 |
| Unskilled Workers |
5,200 hrs |
8.50 |
44,200 |
| Semi-Skilled Workers |
7,250 hrs |
13.40 |
97,150 |
|
|
|
2,66,150 |
Calculate all possible labour/labor variances.
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 and LYV/LSUV = ;]
|
| 09. |
The details regarding the composition and the weekly wage rates of labour force engaged on a job scheduled to be completed in 50 weeks are as follows:
Category of
Worker |
Standard
No. of
Labour |
Weekly
Wage Rate
per laborer |
Actual
No. of
Labor |
Weekly
Wage Rate
per labourer |
| Skilled |
70 |
250 |
70 |
260 |
| Semi-Skilled |
55 |
225 |
60 |
225 |
| Unskilled |
75 |
150 |
80 |
140 |
The work is actually completed in 60 weeks. Calculate the various labour variances.
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ; LYV/LSUV = ;]
|
| 10. |
The standard of labour mix for producing an article in a particular week is:
45 men @ Rs. 12 per hour for 50 hours
25 women @ Rs. 10 per hour for 40 hours
15 boys @ Rs. 8 per hour for 50 hours.
But actual labour force used during that week was:
42 men @ Rs. 13 per hour for 55 hours.
20 women @ Rs. 11 per hour for 40 hours.
8 women @ Rs. 10 per hour for 40 hours.
13 boys @ Rs. 8.25 per hour for 60 hours.
You are required to calculate all possible labour/labor variances:
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ; LYV/LSUV = ;]
|
| 11. |
The budgeted labour force for producing 1,000 articles ‘X’ is
|
|
Total
standard
Hours |
|
Total
standard Cost
(Rs.) |
| 40 men |
@ Rs. 5 per hour for 50hrs |
2,000 |
|
10,000 |
| 25 women |
@ Rs. 3 per hour for 40 hrs |
1,000 |
|
3,000 |
| 20 boys |
@ Rs. 2.50 per hour for 25 hrs |
500 |
|
1,250 |
|
|
3,500 |
|
14,250 |
The actual data and related work force are as follows:
Articles produced, 1,000
|
|
Total
actual Hours |
|
Total
Cost
(Rs.) |
| 55 men |
@ Rs. 6 per hour for 50 hrs |
2,750 |
|
16,500 |
| 20 women |
@ Rs. 2.50 per hour for 30 hrs |
600 |
|
1,500 |
| 10 boys |
@ Rs. 3 per hour for 15 hrs |
150 |
|
450 |
|
|
3,500 |
|
18,450 |
Calculate all possible Labour/Labor variances.
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0;LYV/LSUV = ;]
|
| 12. |
| Standard |
For
100 hours
|
|
Grade A : 80 workers @ Rs. 13 per hour
Grade B : 70 workers @ Rs. 11 per hour
|
| Actual |
For
100 hours
|
|
Grade A : 78 workers @ Rs. 12.50 per hour
Grade B : 72 workers @ Rs. 10 per hour
|
Calculate all possible Labour/Labor Variances
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ;LYV/LSUV = ;]
|
| 13. |
The standard labour component and the actual labour component engaged in a week for a job areas under:
|
|
Skilled
workers |
Semi-skilled
workers |
Unskilled
workers |
| (a) |
Standard number of workers in the gang |
28 |
12 |
10 |
| (b) |
Standard wage rate
per hour (Rs.) |
15 |
12 |
10 |
| (c) |
Actual number of workers
employed in the gang during
the week |
25 |
14 |
11 |
| (d) |
Actual wage rate per hour (Rs.) |
16 |
12 |
9 |
During the 40-hours working week, the gang produced 1,800 standard labour hours of work.
Calculate the different labour variances.
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ; LYV/LSUV = ;]
|
| 14. |
The original standard rate of pay in a factory was Rs. 8 per hour. Due to settlement with trade unions, this rate of pay per hour is increased by 15%. During a particular period, 8,000 actual hours were worked whereas work done was equivalent to 6,400 hours. The actual labour cost was Rs. 76,800. Calculate labour variances.
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ; LYV/LSUV = ;]
|
| 15. |
A large manufacturing company with a diverse range of products is developing the use of standard costing throughout its divisions. A full standard costing system has already been implemented in Division A, including the sue of mix and yield material variances, and attention has now turned to Division B where the main problem concerns labour.
Division B makes highly complex work stations which incorporate material handing, automatic controls and robotics. Manufacture is a team effort and the team specified for work station 26 comprises:
2 supervisors paid Rs. 8 per hour
10 fitters paid Rs. 6 per hour
6 electricians paid Rs. 6 per hour.
2 electronics engineers paid Rs. 7 per hour
4 labourers paid Rs. 4 per hour
Output is measured in standard hours and 90 standard hours are expected for every 100 clock hours. During a period the following data were recorded.
|
Actual hours |
|
Actual pay |
| Supervisors |
170 |
|
Rs. 1,394 |
| Fitters |
820 |
|
4,920 |
| Electricians |
420 |
|
2,562 |
| Electronics engineers |
230 |
|
1,725 |
| Labours |
280 |
|
1,120 |
| Total |
|
|
|
1,650 standard hours were produced.
The factory director of Division B is anxious to gain the maximum information possible from the standard costing system. He sees no reason why the normal labour efficiency variance could not be divided into sub-variances in order to show separately the effects of non-standard team composition and team productivity in a similar fashion to the material usage variance which can be sub-divided into mix and yield.
You are required to calculate labour variances.
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0;LYV/LSUV = ;]
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cost,material,labour,fixed,variable,overhead,sales,profit,variance,reconciliation,standard,actual,formula interpretation,accounting.
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